Rogers, Shaw delay merger to resolve Competition Bureau injunction

The companies say they will be working towards addressing the Bureau's concerns to avoid Tribunal.

Rogers and Shaw have agreed to put their merger on hold until the Competition Bureau’s concerns about the deal are resolved.

As such, the Commissioner of Competition will no longer be seeking an injunction to block the deal, at least at this time. The Bureau first signaled its opposition to the merger earlier this month, citing share of the market Canada’s major telcos already own and the impacts the merger would have on wireless prices and competition in the sector.

Roger said in a statement issued late on Monday that the agreement with the Commissioner gives it and Shaw the ability to focus on resolving concerns with the merger. If that doesn’t happen, the application to block the merger will be brought to the Competition Tribunal, where Rogers and Shaw intend to oppose it.

One of the things Rogers and Shaw will be looking to address is the sale of Freedom Mobile, which is believed to be a major sticking point in the deal receiving approval. One of the Competition Bureau’s concerns is that the flanker mobile carrier be sold to a company that can maintain its operations and provide effective competition against the big three telcos. The Globe and Mail previously reported that Rogers had proposed New Brunswick-based ISP Xplornet as a buyer. Quebecor or Globalive Capital, an investor group that includes Wind Mobile founder Anthony Lacavera, both of which have signaled their interest in acquiring Freedom but have reportedly been left out of negotiations.

Rogers did not signal whether this agreement would change its previously extended July 31 for the deal to close, though a schedule for the Commissioner’s application is expected soon.

The deal has been previously approved by shareholders and the CRTC, although the latter came with a hefty list of conditions. In addition to the Competition Bureau, the deal also requires approval from Innovation, Science and Economic Development Canada.